As an agent who has been writing Auto Repair shops for many years, I can’t tell you how many times I have seen a shop written by someone else with Garagekeepers Legal or Garagekeepers Excess. In order to do the proper coverage, the shop needs Direct Primary. Then, there are no issues with coverage should a claim happen. If the claim is someone else’s fault besides the insured, the company subrogates against them. In the meantime, the customer of the shop’s claim is handled subject to the deductible.
Best dollar value is Direct Excess. It responds on behalf of the insured whenever the dealer is legally liable and will also respond if the customer has no available insurance even when the dealer is not legally liable.
I agree with Agent above. This coverage is really customer relations coverabge adn a good shop that is protective of its reputaiotn should never have to send a customer to an outside party for loss compendation when it is so easy to purchase direct priamary coverage and let its own insurer handle that end. Of course, direct primary is more costly than legal liability, but I think most shop owners, with some degree of business accumen, would understand the need to expend the additonal premium once the customer relations situation is pointed out to them. Besides that, most people today hold the business they deal with responsible no matter who else is involved anyway.
As for calculating the need, that is always a “moving target” given the varied types and number of vehicles on premises at any given time. As with any insurance, the worst case scenario must be considered – i.e. a total loss to all vehicles on premises due to, say, an arsonist, or vandalist – caused fire. Yes, purchasing coverage from these two approaches will be more expensive, but the alternative could put the firm out of business if a serious loss occurred. Insurance premiums are always budgetable but uncovered losses are not, especially if they are catastrophic.
Typically, in garage keepers legal, in the case of loss, inordered to be covered the loss or damage to vehicles in care custody and control must be caused by negligence of the insured garage. Fires aren’t always due to negligence of the garage.
I agree that there is alot of coverage misunderstanding in garage. I’m also suprised that a BOP policy fully acommodates a repair garage.
We use a garage package approach where wheels coverage is triggered by applying symbols which stand for a variety of wheels related coverages. Further, some businesses have a garage keepers legal exposure and may not know it such as accessory shops that provide installations. An agent needs to inform the prospect.
Such matters are just problems looking for sollutions afer all.
I’ve been trying to get this message across for over 20 yrs. It drives me crazy when underwriters use the terms garage liability and garagekeepers liability interchangeably.
Back in the day when they offered a Garage Coverage form, they also offered Garagekeepers on that form. Most of those old forms have been discarded in favor of Commercial General Liability, Garagekeepers & Hired & Non-Owned Auto. The Excess Surplus lines still use the old forms, but the Standards generally do not. I have one carrier who does a BOP on a Garage and Garagekeepers Direct Primary is offered also as part of the perk coverages. Works a whole lot better than the old way and is less expensive if the valuation on the Property is not high.
There are a lot of nuances to this coverage. In essence it is a bailee’s exposure/coverage but one with some potentially high values and unusual exposure (say compared to a dry cleaner). Test driving the customers car is common and accidnts occurring during the test drive are not uncommon. On the other hand, depending on the size of the business the insured may NOT want to pick up all losses regardless of liability. Remember these appear on their loss runs and can have an impact on future insureability and pricing. Without question, a great deal pf PR is often involved so it can be a slippery slope. If you have 20 customer cars sitting in the open area of shop and a hailstorm hits and you are carrying GKL Direct Primary Comprehensive, you just pick up 20 significant hail losses on your commercial insurance. This is especailly troublesome if you are in a state that doesn’t allow the PAP to charge weather events as losses for premium or renewal purpose sicne the individuals PAP’s would ahve paid these claims and there woudl be almost no possibility of subro against insured.
So if I have a service garage that needs CC&C coverage for customers do I add Garage Keepers Legal as well as Garage Keepers Physical damage. Would both go those coverages respond to customers vehicles left in the insureds CC&C? Is the liability section included under the Business Auto liability limits or do both have to be specifically scheduled on the garage keepers form? Sorry, my first garage and want to get it right! Thanks so much!!
I don’t know what state you are in, but most states have either Garagekeepers Legal or Garagekeepers Excess or Garagekeepers Direct Primary and they are the physical damage coverage of customers autos in the care, custody or control of the shop. Commercial General Liability covers the premises/operations, Hired & Non-Owned Auto covers the liability of the shop if the shop is test driving a customer’s auto and has an at fault accident. Always sell Direct Primary to the shop and that covers all the bases with a physical damage claim of the customers auto.
The exclusion in question is Care, Custody **OR** Control. The word and implicates it needs to be all three.
As an agent who has been writing Auto Repair shops for many years, I can’t tell you how many times I have seen a shop written by someone else with Garagekeepers Legal or Garagekeepers Excess. In order to do the proper coverage, the shop needs Direct Primary. Then, there are no issues with coverage should a claim happen. If the claim is someone else’s fault besides the insured, the company subrogates against them. In the meantime, the customer of the shop’s claim is handled subject to the deductible.
Best dollar value is Direct Excess. It responds on behalf of the insured whenever the dealer is legally liable and will also respond if the customer has no available insurance even when the dealer is not legally liable.
I agree with Agent above. This coverage is really customer relations coverabge adn a good shop that is protective of its reputaiotn should never have to send a customer to an outside party for loss compendation when it is so easy to purchase direct priamary coverage and let its own insurer handle that end. Of course, direct primary is more costly than legal liability, but I think most shop owners, with some degree of business accumen, would understand the need to expend the additonal premium once the customer relations situation is pointed out to them. Besides that, most people today hold the business they deal with responsible no matter who else is involved anyway.
As for calculating the need, that is always a “moving target” given the varied types and number of vehicles on premises at any given time. As with any insurance, the worst case scenario must be considered – i.e. a total loss to all vehicles on premises due to, say, an arsonist, or vandalist – caused fire. Yes, purchasing coverage from these two approaches will be more expensive, but the alternative could put the firm out of business if a serious loss occurred. Insurance premiums are always budgetable but uncovered losses are not, especially if they are catastrophic.
Typically, in garage keepers legal, in the case of loss, inordered to be covered the loss or damage to vehicles in care custody and control must be caused by negligence of the insured garage. Fires aren’t always due to negligence of the garage.
I agree that there is alot of coverage misunderstanding in garage. I’m also suprised that a BOP policy fully acommodates a repair garage.
We use a garage package approach where wheels coverage is triggered by applying symbols which stand for a variety of wheels related coverages. Further, some businesses have a garage keepers legal exposure and may not know it such as accessory shops that provide installations. An agent needs to inform the prospect.
Such matters are just problems looking for sollutions afer all.
I’ve been trying to get this message across for over 20 yrs. It drives me crazy when underwriters use the terms garage liability and garagekeepers liability interchangeably.
Back in the day when they offered a Garage Coverage form, they also offered Garagekeepers on that form. Most of those old forms have been discarded in favor of Commercial General Liability, Garagekeepers & Hired & Non-Owned Auto. The Excess Surplus lines still use the old forms, but the Standards generally do not. I have one carrier who does a BOP on a Garage and Garagekeepers Direct Primary is offered also as part of the perk coverages. Works a whole lot better than the old way and is less expensive if the valuation on the Property is not high.
There are a lot of nuances to this coverage. In essence it is a bailee’s exposure/coverage but one with some potentially high values and unusual exposure (say compared to a dry cleaner). Test driving the customers car is common and accidnts occurring during the test drive are not uncommon. On the other hand, depending on the size of the business the insured may NOT want to pick up all losses regardless of liability. Remember these appear on their loss runs and can have an impact on future insureability and pricing. Without question, a great deal pf PR is often involved so it can be a slippery slope. If you have 20 customer cars sitting in the open area of shop and a hailstorm hits and you are carrying GKL Direct Primary Comprehensive, you just pick up 20 significant hail losses on your commercial insurance. This is especailly troublesome if you are in a state that doesn’t allow the PAP to charge weather events as losses for premium or renewal purpose sicne the individuals PAP’s would ahve paid these claims and there woudl be almost no possibility of subro against insured.
So if I have a service garage that needs CC&C coverage for customers do I add Garage Keepers Legal as well as Garage Keepers Physical damage. Would both go those coverages respond to customers vehicles left in the insureds CC&C? Is the liability section included under the Business Auto liability limits or do both have to be specifically scheduled on the garage keepers form? Sorry, my first garage and want to get it right! Thanks so much!!
I don’t know what state you are in, but most states have either Garagekeepers Legal or Garagekeepers Excess or Garagekeepers Direct Primary and they are the physical damage coverage of customers autos in the care, custody or control of the shop. Commercial General Liability covers the premises/operations, Hired & Non-Owned Auto covers the liability of the shop if the shop is test driving a customer’s auto and has an at fault accident. Always sell Direct Primary to the shop and that covers all the bases with a physical damage claim of the customers auto.